This is interesting. I was under the impression that once they quote an interest rate, it will be valid for ‘x’ number of days and will not be updated on the basis of the change in swap rates.
Thanks, will speak with the bank on this.
Ask the lender how it works, for my lender it’s only valid that day. You might also consider using a broker. I haven’t used one myself but there could be some benefits to doing so. Maybe someone else has direct experience
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Following the inflation data for March, the 2 years SWAP rate is now down to 0.1, clearly assuming we are soon going down to 0% interest rate or even lower. https://www.investing.com/rates-bonds/chf-2-years-irs-interest-rate-swap
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The recent news coming from the US have lead the CHF to increase in value against both EUR and USD thereby reducing inflation expectations for the coming months. This market is crazy and you never know what can happen overnight…
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Does this means a cut for June is now more likely than before? If that happen, will it influence long term mortgages, or still not?
Yes and no.
Assuming all banks now assume no rate cut in June why do you say No for mortgage fix falling? UBS is the biggest one and they said cuts are finished so if 1 comes it has to be treated as re-adjustment downwards as a surprise move.
Need some feedback on the interest rates from the esteemed forum members.
So, I have received the interest rates from 3 different banks this week.
Bank 1 - 5 year 1.4%; 10 year 1.7%
Bank 2 - 5 year 1.55%; 10 year 1.8%
Bank 3 - 5 Jahre 1.13%; 10 Jahre 1.42%
So, the Bank 3 rates look really good to me to fix, especially for 5 years.
Would love to get some feedback on these rates and whether it makes sense to fix or wait for some more time and monitor.
In case you need any more details to comment, happy to provide!
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Given the fall of 30 bp from the recent highs on the 10y swap and short term swaps now close to 0 I would say yes another cut in June or September is more likely than it was 2 weeks ago. But again the market is so volatile that the situation might be reversed next week… Base rates might have fallen over the past few days but the volatility makes it difficult for banks to implement low margins.
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What’s bank 3? Spread the love (info)!
Hi everyone! First time poster and long time lurker here.
I wanted to see if anyone could give me some advice on taking out a SARON mortgage. Let’s say I am choosing between two banks that have given the following offers:
Bank A - 0.65% margin, 3 years
Bank B - 0.95% margin, unlimited term, need to transfer 100K assets to investment account
Now, obviously Bank A initially looks more attractive. But given recent global events, everything just seems really uncertain. We are concerned that if either me or my wife lose their job around the time when we need to renew Bank A’s mortgage, then we’d find ourselves in a deep trouble (or saddled with really bad rates).
My theory is that with Bank B’s unlimited term SARON, we don’t have to worry about reassessments. So from the bank’s perspective as long as we continue to pay the monthly/quarterly dues, everything should be fine. We won’t have to worry so much if one of us temporarily loses employment - we are relatively certain of finding jobs given enough time.
From my calculations, a 0.3% difference in rates amounts to paying CHF 2,250 more per year if we choose Bank B (as well as their higher fees to trade/hold equities as I would be switching from IBKR). We currently feel it might be worth it to choose Bank B if we are able to negotiate a further 0.1 to 0.15% decrease in their rates, leveraging Bank A’s offer.
I do not know how Bank A (or just banks in general) go about with mortgage renewals. Do they tend to give the same offer/rates? (ie what is the likelihood that we’d continue to enjoy the 0.65% margin in succeeding mortgage terms?) Is the assessment of your financial situation less intense as a new application? And am I correct in assuming unlimited term mortgages don’t require reassessments? Are we crazy for potentially letting go of a really really good margin rate for something that’s not worth it???
Sorry for the flood of questions! Let me know your thoughts - any and all feedback are welcome 
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The bank that’s too big to fail.
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+1 for these questions! I also wonder how it is, when one could expect reassessments, in my case, especially what BCV tends to normally do ;).
FYI - we bought a house in 2021, took over the mortgage with 4 tranches from the owner and then added 5th tranche on top - fixing it for 10 years. Then we were renovating and in 2023, we’ve added 6th tranche on top. They were not requesting any supporting documents, apart from renovation related.
Also in 2023 we have blocked the rates for the tranches we took over from the previous owner (which were expiring in 2024). Again - no questions about salary or tax certificates asked. So I wonder when normally we could expect that again.
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Sometimes banks ask you to sign a power of attorney that they can use to check your financial situation. Also, if your salary account is with the same bank, all income is visible by default and checks are done in the background.
One question I have is: if you have indirect amortization via 3a and you stop working, are you still allowed to contribute to 3a and do the indirect amortization? Or what happens in that scenario?
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Why don’t you consider a fixed term mortgage, then?
What does “unlimited” mean here? In my case it’s unlimited but can be changed by either party every 3 months.
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This is good, where do you get this from, if I may ask?
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The product you chose is independent from the frame limit (i.e. the credit line) and the review process is typically enforced at the credit line level, that is, regardless of what bank you go for they will do reviews of your situation (in general yearly). Sometimes this process will be seamless to you because you pay on time and they see money coming to the account but in other cases they might ask you to provide some documentation and justify again your income. If you read the fine prints of a mortgage contract (again the credit line one and not the product one) it is quite often found something along theses lines : “should your situation or that of the market change, additional collateral may be asked by the bank”.
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Some banks require a formal review at the end of the term so want to see you bank/salary statements etc.
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I’d go with the shorter cheaper one unless there’s a specific reason for why you expect your job situation to change.